Leasing of Aircraft 9966 GST (18%), but company paid 5% under SAC 9973.

[Anand Lobo]

The Company provides aircraft charter services along with pilots and crew. From July 2017 to September 2019, the Company classified the service under SAC 9973 and charged GST at 5%.

During scrutiny of GST returns and financials, the Department has taken the view that the service should fall under SAC 9966, taxable at 18%, instead of 5%.

Pls share view along with any judgment

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

I am of the opinion that the services will be under SAC 996603 - "Rental services of aircraft including passenger aircrafts, freight aircrafts etc with or without operator" taxable at 18%.  In my practical experience GST department officials are generally precise (barring certain aberrations) in classification and any contrarian view must be examined with a fine tooth comb before the RP contemplates further adjudication.  Thanks

[Sadanand Bulbule]

Also refer the following:

In Circular No. 234/28/2024-GST dated 11.10.2024, based on recommendations of the 54th GST Council meeting, CBIC clarified that:

Passenger transport by helicopter on a seat-share basis is taxable at 5% (regularized for past period).

Transport of passengers by helicopter on other than seat-share basis i.e., charter operations will continue to attract GST at 18%

 

[Shilpi Jain]

Presently 9966 covers only those rental arrangements where operator is also provided and 9973 covers situations where vehicle is provided without operator. However, earlier, intially when GST was introduced both these were applicable whether wiht or without operator.

So one needs to analyse this aspect and your specific case scneario to see what would bethe rate of tax applicable.

AI Summary

GST classification of aircraft services: seat-share helicopter transport attracts lower tax, charter operations attract higher tax. Determination of GST classification depends on whether aircraft supply is packaged with crew; the department reclassified services from SAC 9973 to SAC 9966 where operator-included rentals are treated at the higher tax rate. CBIC guidance differentiates seat-share helicopter passenger transport (lower rate regularised) from charter and other non-seat-share operations (higher rate). Accurate contractual and operational analysis is essential to establish the applicable SAC and tax exposure.